Explain how diversification can reduce risk of a portfolio

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Reference no: EM131338819

1. Under what circumstances will the coefficient of variation of a security's returns and the standard deviation of that security's returns give the same relative measure of risk when compared with the risk of another security?

2. Explain how diversification can reduce the risk of a portfolio of assets to below the weighted average of the risk of the individual assets.

Reference no: EM131338819

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